For many years, distributors viewed Group Purchasing Organizations (GPOs) as the enemy. After all, GPOs are designed to get the highest quality and the best price for their members. A GPO works by leveraging the combined purchasing power of their members resulting in incredible discounts that are usually only available to larger chains.
Distributors, on the other hand, work in a highly competitive field, developing relations and undercutting their competitors, and viewed the GPO as an unwanted middleman that infringed upon their margins.
Fortunately, for both independent restaurant operators and those that supply them, those times have changed.
The Benefits of a Food Distributor Partnering with a GPO
In today’s environment, it’s clear that, when distributors and GPOs are in alignment with goals and objectives, their relationship results in a winning combination. A GPO offers distributors access to many more customers, operators that have developed a level of trust with their group purchasing organization partner and thereby extend it to the distributor.
Auditing, provided by the GPO, also delivers transparency, and adds an additional layer of trust to the relationship between operator and distributor. While some distributors may question this benefit, operators are quicker to jump on the food distributor bandwagon with this safety measure in place.
Through their GPO partner, distributors have access to supply chain leaders and, by working with their partner and developing new sales tactics, can shift business to their contract. What may start as limited sales of a few products can transform into large scale multiple line items.
Like a watchdog, when a food distributor finds out that an operator is a member of a GPO, and working with a distributor within their network, they understand that converting this client will be an uphill battle, thereby limiting competition.
In addition to decreasing competition, GPOs provide distributors new market penetration and the ability to offer their existing operators additional savings through rebates.
Knowing that their role as the route-to-market is solidly defined, the top 10 broadline distributors have been increasing the amount of business they do with GPOs for over 10 years. They understand that GPOs are a growing consideration for operators, moving their product and even service purchasing decisions to a specific, congregated organization.
When distributors and GPOs work together, they are able to identify cost-saving opportunities for their operators as well as avenues for growth for their manufacturing partners.
The Benefits of Food Supplier Wholesale Companies Partnering with a GPO
As John Davie, CEO of Buyers Edge Platform, shared with FSR, “Vendors who partner with a group purchasing organization gain hundreds, if not thousands, of new clients and are able to lock in large contracts with less selling time.”
Suppliers then offer price discounts and rebates on food supplies and equipment to members of the GPO, and the circle is complete.
This relationship offers manufacturers a direct line to operators, a path that is often obscured due to the supplier’s inability to make direct calls to independent operators, relying on national chain restaurants or distributors that reach this segment of the market.
A good GPO will also seek out and partner with local suppliers, the “little guy” that delivers high-quality, in-demand restaurant supplies, but has limited capability in terms of distribution. This allows them significant exposure and sales opportunities that were once exclusive to large manufacturers.
A wholesale food supplier seeking growth can streamline their sales by working directly with a GPO instead of numerous disjointed organizations. This partnership also provides a platform suited to introducing new products before full-scale production and commercial development. Operational efficiency is increased as suppliers can provide their food supplies and equipment to thousands of operators through one GPO.
The Benefits of Partnering with Buyers Edge Platform
Distributors recommend Buyers Edge Platform to their customers in order to give them access to over 350 manufacturer contracts. And by becoming a partner, distributors and suppliers are given access to technology tools that bring them an advantage in a competitive bid situation.
Beyond Prime Programs, programs that offer exceptional value, can be passed on from distributors to their clients. These programs offer savings on non-food services and products such as office supplies, credit card processing, cash handling, restaurant technology, and employee perks that include access to brands offering discounts on apparel, shoes, and cell phones.
Distributors also have access to FoodBAM, an exclusive online food ordering and inventory app that allows operators to order directly from distributor’s product catalogs which then routes a purchase order to distributors.
Buyers Edge Platform’s partners are able to reward customer loyalty, promoting brand-loyal client’s, by paying quarterly rebates that drive conversion and encourage product sampling.
Working together creates a whole that is greater than the sum of its parts, and that is the beauty and benefit of partnering with Buyers Edge Platform.